Condition 1: MC curve cuts the Price line from below.

Condition 2: MR is equal to MC

Are these conditions sufficient for a firm in a perfectly competitive market to find out the maximum profit level of output?

No, these conditions are right and there is a third condition also

The correct answer is option 3: No, these conditions are right and there is a third condition also

In a perfectly competitive market, a firm maximizes profit when:

1️⃣ Marginal Revenue (MR) = Marginal Cost (MC) ✅ (Given as Condition 2)

• Since a perfectly competitive firm is a price taker, the market price (P) = MR.
• Therefore, profit maximization occurs where P = MC.

2️⃣ MC Curve Cuts the Price Line from Below ✅ (Given as Condition 1)

• This ensures that MC is rising, which is an important condition for profit maximization.

However, there is also the condition that the price must be greater than or equal to the minimum point of the Average Variable Cost curve. If the price is below the AVC curve, the firm would be better off shutting down in the short run. In the long run, price must be greater than the average cost (p > AC)